February was another strong month for non-farm payrolls. In keeping with recent months, we have seen general improvement across a broad array of employment measures. 227,000 net new jobs were created and the U-3 official. Overall unemployment rate remained at 8.3%. It is clear from the report that all things auto-related are booming. People engaged in metal and auto production, parts and sales have had a strong 2012. Retail employment was very weak in February but, this weakness was fully offset by strength in all things auto retail. Temporary employment had another strong month with 45,000 jobs added. African American men over 20 were the exception. African American males over 20 saw their unemployment rate rise from 14% to 15.2% across the month of February 2012.February was another strong month for non-farm payrolls. In keeping with recent months, we have seen general improvement across a broad array of employment measures. About 227,000 net new jobs were created and the U-3 unemployment rate remained at 8.3%.

Long-term unemployment remains a significant issue. About 5.4 million Americans have been out of work and looking for work, for 27 weeks or longer, 43% of the unemployed are long-term unemployed. The government sector remains weak with 6,000 net job losses in February 2012. Usually we see large job losses at the state and particularly the local level. In February, local government added jobs and the state level was flat. Public sector job losses came from the federal government in February. The February public sector report is much stronger than the average in 2011. In 2011, the public sector lost an average of 22,000 jobs a month or more than a quarter of a million jobs in 2011.

Max Wolff: Working More for Less

December and January payroll numbers were revised up by 20,000 and 40,000 jobs, respectively. The U-6 inclusive unemployment measure, that includes involuntary part-time workers and marginally attached workers, fell to 14.9% from 15.1% in January.  

On Wednesday 07 March 2012 The BLS was kind enough to give us the 4Q2011 productivity numbers. These numbers revealed several very interesting facts that have been under reported. We saw another increase in productivity for the final quarter of last year. 2011 was, however, the smallest year over year productivity increase in a while. Productivity continues to rise, .3% across 2011. Hours worked and compensation have begun rising as well. This is reducing the profit growth coming from labor productivity. Real hourly compensation fell .7% in 2011. This deserves more attention than it has been receiving. Productivity reporting is telling us that household earnings are not keeping up with inflation and that we have neared the exhaustion point of doing more with less. Hours worked are rising and compensation is rising. Thus, unit labor costs are likely done falling.

Americans' Used Clothes are Causing Upheaval in Mexico

It appears that hiring, compensation and hours worked are rising more rapidly than productivity. This suggests that the period of meteoric rise in profits and corporate earnings is largely behind us. Real hourly compensation was negative in 2011 and this leaves households vulnerable. We have not seen the mass of Americans rebuild their battered prosperity. Wages and employment have badly lagged economic growth and houses remain far less valuable than they were in 2007. It looks like slightly broader improvement has arrived. This may help incumbent politicians in 2012 but portends less profit growth and continued pressure on the middle class. See real average hourly earnings, inflation adjusted, monthly changes over the last 6 Januarys. Earnings have and continue to badly lag inflation. This goes some distance toward explaining public anger about the economy.

Max Wolff is Chief Economist for GreenCrest Capital and teaches economics at the New School University Graduate Program in International Affairs. His work can be seen on Bloomberg, Reuters, NPR, BBC, The Huffington Post, The Wall Street Journal and other outlets.

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